Moody's upgrades Philippines to "Investment Grade"

In May, Standard and Poores upgraded the Philippines to "Investment Grade" and now Moody's has followed suit by moving the country from "Ba1" to "Baa3" as explained in this Manila Bulletin story.

Interestingly the World Bank's forecast - that the Philippine economic growth will rise by 6% per annum - stops at 2015, the year when the country elects its new President.

Very funny John

That's no surprise. Binay, backed by Estrada, and helped by a wall of Marcos money, will get in and everything will come crashing down once more. The country was looking pretty good in 1996, too...

So, an investment rating upgrade, despite the JLN Pork Barrel scandal?

The rating is just a measure of the Government's ability and willingness to repay its overseas borrowings. The wall of money sent each month by OCWs means that the Philippines has a strong balance of payments, and the country's banks have a reputation for prudence.

The effect of investment grade status is to reduce the Philippines' Government's cost of borrowing - this is definitely good news.

Your knowledge on a wide range of topics never ceases to amaze me methersgate and you along with markham provide some of the most stimulating discussions on this forum.

I must admit I was having a bit of a go at markham as he reckoned that Standard & Poors would actually downgrade the Philippines on the back of the JLN Pork Barrel scandal and it is twice now that markham has misspelled Poors

"Bullsxxx baffles brains" is the merchant service term I fancy! I am no expert!

I think the market looks to the future not the past and has already "priced in" the JLN scandal; what is interesting is Markham's point that the market has no confidence beyond 2015.

After a hundred years of corruption, most foreigners concerned with investment decisions assume that nothing much will ever change.

Some of my astute and well connected friends in Manila think that the Aquino government is pursuing a long term strategy aimed at cleaning the place up a bit, and that the impeachment of Corona was the first step in that process; they think that the next phase will involve pursuing prominent politicians who do not have a strong base in the countryside but who have enriched themselves unjustly. The JLN scandal could fit this strategy. We will have to see what happens.

At least you read and remember what I wrote; some don't and comment on what they think I said. As for the "Napoles Effect" on the Philippines' standing, I think the jury is out. Much will depend on how Aquino and his trusted lieutenants act between now and the election. If a large number of past and present legislators are implicated and charged with plunder then this might signal the end of patronage politics which might lead to Aquino being succeeded by a President intent on continuing the reforms - and that won't be Binay - which might encourage the credit reporting agencies to maintain an "investment grade" for the country. But if all Aquino's good works become unravelled in the next Presidency, then I would expect the country's rating to drop once more.

I agree.

The practical problems are twofold - first the clans just buy their votes from the poor, using inter alia the pork barrel, and when you are worried about where tomorrow's meal is going to come from you are not going to be squeamish about taking a couple of thousand pesos for your vote or about worrying where you benefactor
got the money. He is just the Big Man in your life.

Next, the political structure is so rotten that everyone is implcated in something...

Why not have a flutter on some Philippine oil and gas stock?

You paint a picture of uncertainty. Not a background people like to invest in.

Are they any more pork barrel scandals to be unravelled? It would seem suprising if Napoles had a monopoly on this for ten years.

There most certainly are. Janet Lim-Napoles was just the most egregious operator and one who was careless enough to get caught.

Already the ripples are spreading out to other pork barrel scams, to the Malampaya Fund...

Sounds like she is getting the blame for the whole lot.

It's a diversion tactic - remember the film "Wag the Dog?"

And not the only one.

Some people, including a Senator, have suggested that one Senator paid P40M to Nur Misuari to start the trouble in Zamboanga del Sur to take the pressure off him and his allies in the Senate. It is said that the reason the President spent so long in Zamboanga was that he was (a) checking with Americans who have good intelligence there and (b) making sure that the AFP take their orders from him and not from the chap who is said to have paid P40M to start the trouble.

Sounds a bit of a mess, to be honest. I never knew the Philippines was quite that bad. Astounding.

Miriam says:

Miriam: PHL govt has turned into a 'kleptocracy' due to 'morons' in politics

http://www.philippinenewsportal.com...-into-a-kleptocracy-due-to-morons-in-politics